By: Mark Fitzgerald
Lee Enterprises Inc. said Friday that advertising sales strengthened in November and that it expects operating revenue declines to moderate for the fourth quarter.
“Based on trends through early December, we’re hopeful that the turnaround has begun,” Lee Chairman and CEO Mary Junck said in a statement. “Although it’s premature to guess when year-over-year revenue comparisons will turn positive, we expect our aggressive cost reductions will enable meaningful earnings growth when they do.”
Lee said it now expects Q4 operating revenue to show a 14% to 15% decline from the last quarter of 2008. That’s a moderating decline from the approximately 20% year-over-year comparisons for the first three quarters of 2009.
Junck said Lee expects cash costs, excluding unusual items, to decrease 17% to18% in the fourth quarter, an improvement from earlier guidance.
Cash costs should be down by 6% to 7% for fiscal 2010, Lee added.
In another indication of its improving balance sheet, Lee said when it files its 10K annual report with the U.S. Securities and Exchange Commission (SEC) Friday, its independent accounting firm, KPMG LLP, will not include the explanatory paragraph it included in last year’s annual report, raising doubt about Lee’s ability to continue as a going concern.
Lee said KPMG made the change primarily as a result of its successful debt refinancing last February, its continuing compliance with debt covenants, its “adequate” liquidity, “and now improving business conditions.”